Another gloomy report about housing prices, today from Fiserv via Housing Wire’s Diana Golobay. According to the report, the national average house price went up 2 percent year-over-year in the first quarter of 2010, which is the first year-over-year gain since 2006. At first glance this appears to be good news, but the increase is not widespread, but based upon large gains in a few select markets.
Unfortunately, Fiserv is predicting that single-family home values will fall 4.9 percent over the next twelve months. The predicted drop is attributed to joblessness and the ensuing lack of income, and the massive overhang of distressed and REO property that is either on or will soon hit the market. U.S. News and World Reports actually has a pretty good article on yahoo today that lays out the top 6 reasons for the continued weakness of the housing market. I recommend checking it out.
The steepest declines are predicted for the Nevada, Arizona, and Florida markets, all off which are predicted to decrease 9-11 percent over the next year. David Stiff, Fiserv chief economist was quoted in the article as saying: “The stabilization of residential real estate markets will take many years as buyers and sellers try to find price levels that clear large inventories of vacant homes from the market. Consequently, we expect to see prices bounce up and down around their lows for the next two to three years, especially in markets that experienced the largest home prices bubbles.” In a previous report, Fiserv predicted that it will take until 2025 for homes to get back to 2006 levels in the aforementioned states.
More and more the wisdom of the crowd seems to be indicating that housing prices are going to decline in the next twelve months. The only way that I can see that home prices will not fall would be if there was some sort of dramatic turnaround in the labor market, which seems unlikely right now.
What do you think will happen with housing prices? Let us know in the comments section below.
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